21. “Leaps and Bounds” is a seller and installer of funky playground equipment. At the beginning of 2019, they had a total of $105,000 of inventory (mostly tire swings, jungle gyms, and suspension bridges). During the year they purchased $60,000 worth of additional inventory (towers and zip lines). At the end of the year, they had a $3,500 inventory balance. What was their cost of goods sold? (Format your answer as $xxx,xxx)
$161,500
22. In order to better keep track of their inventory levels, “Leaps and Bounds” has also just switched from an inventory monitoring system that updates every quarter, to one that updates every week. This kind of system is called ________?
- Pervasive System
- Perpetual System
- Proposed System
- Periodic System
23. Please use the information below for Question 14 - 18. Please use FIFO inventory method.
Emily is the owner and operator of “Wine Not”, a wine shop for those who like to try wines from lesser-known vintners. She has grown in popularity with her weekly “Wine-down Wednesdays” tastings and inventory is a consistent worry for her. As Emily’s bookkeeper, you have to ensure that her inventory levels are accurately accounted for at the beginning and end of each month.
In March, she ended with a total of 350 bottles with a cost of $15.00 each. In April, she ordered a total of 150 bottles with a cost of $17.00 each. During the month of April, she sold a total of 225 bottles.
Question 14:
What is the opening inventory value for April?
(Format answer with whole number, no decimal, $x,xxx)
$5,250
24. (Use information in Question 14)
What was the additional inventory value for April?
(Format answer with whole number, no decimal)
$2,550
25. (Use information in Question 14)
What was the total inventory value for April? Also known as the cost of goods available?
(Format answer with whole number, no decimal)
$7,800
26. (Use information in Question 14)
What was the cost of goods sold in April?
(Format answer with whole number, no decimal)
$3,375
27. (Use information in Question 14)
What was the closing inventory value in April/opening inventory for May?
(Format answer with whole number, no decimal)
$4,425
28. When raw materials are used to create a final product, that product becomes a finished good. When that good is sold, the journal entry includes _______________ and ______________________.
Select all that apply.
- Credit to cost of goods sold, Debit of inventory (finished goods)
- Debit to cost of goods sold, Credit to inventory (finished goods)
- Credit to cash/accounts receivable, Debit to sales income
- Debit to cash/accounts receivable, Credit to sales income
29. To correct inventory errors, a bookkeeper needs to do all of the following except? (select the best answer)
- Create a reverse journal entry
- Correct the errors by erasing the old journal entries and make sure the numbers are correct moving forward
- Create new financial reports pertaining to the affected periods
- Include a disclaimer explaining why new financial reports are being run